Firm Dynamics in Transition
49 Pages Posted: 10 Mar 2007
This paper analyzes the firm dynamics during the process of transition. We show how firm size distribution has transformed over the course of transition and relate this evolution to theoretical contributions of different models. We find that the model of firm dynamics by Cooley and Quadrini (2003) is consistent with many empirical regularities observed during transformation. In particular, dynamics is affected by financing constraints and the speed of adjustment of productivity of large firms.
Keywords: manufacturing, size, labor productivity, total factor productivity, catching up, distributions, transition
JEL Classification: L11, L16, L60
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